Budget Entry-Level PCs Under $500 to Vanish by 2028 Due to Memory Price Surge

Research firm Gartner has issued a stark warning for the PC industry: the entire sub-$500 entry-level segment is expected to disappear by 2028. Surging memory costs, fueled by massive AI data center demand, are making cheap PCs impossible for manufacturers to produce profitably.

Memory prices are on track for a dramatic 130 percent increase in combined DRAM and SSD costs by the end of 2026. This spike will drive average PC prices up 17 percent compared with 2025 levels. Memory alone will jump from 16 percent to 23 percent of a typical PC's total bill of materials next year.

"This sharp increase removes vendors' ability to absorb costs, making low-margin entry-level laptops nonviable. Ultimately, we expect the sub-$500 entry-level PC segment will disappear by 2028."

said Ranjit Atwal, senior director analyst at Gartner.

The effects will hit hard and fast. Global PC shipments are forecast to fall 10.4 percent in 2026 versus 2025 levels. That marks the steepest yearly drop in more than a decade. Buyers will simply keep their current machines longer instead of paying higher prices for replacements.

Gartner expects PC lifetimes to stretch by 15 percent for business users and 20 percent for consumers by the end of 2026. Longer replacement cycles bring new worries about outdated security patches and rising support costs for aging hardware.

Premium devices will fare better because they carry enough margin to handle the cost pressure. Demand will shift strongly toward higher-end models. Vendors are being told to accept lower unit sales rather than slash prices and destroy profitability.

Even the AI PC boom faces delays. Earlier projections called for AI-equipped machines to hit 50 percent market share before the end of the decade. Rising memory needs for on-device AI processing have now pushed that milestone back to 2028.

The same forces are reshaping the smartphone world. Shipments there are expected to drop 8.4 percent in 2026, with basic models suffering the most as buyers turn to refurbished units or simply hold onto older phones.

For everyday consumers and budget-conscious gamers, the outlook means fewer options at the low end of the market. Entry-level desktops and laptops that once filled retail shelves could soon become relics. Manufacturers will focus on mid-range and premium systems where margins remain healthy.

Device makers and retailers have a narrow window in early 2026 to adjust pricing strategies before inflation fully squeezes profits from the second quarter onward. Atwal warned: "Overall, device vendors and channels face a critical window in the first half of 2026 to optimize pricing and protect margins before component inflation compresses profitability from the second quarter onwards."

The memory crisis stems from explosive AI infrastructure growth that has outstripped supply. Until new production capacity comes online, consumers should prepare for a world without truly affordable new PCs. Refurbished or used systems may become the practical choice for those unwilling or unable to spend more.

This forecast underscores how AI-driven demand at the enterprise level is now directly reshaping what ordinary users can buy for home or office use.